WILSONVILLE, OR -- Mentor Graphics narrowed its fiscal first quarter loss to $2.35 million as revenue surged 27% year-over-year.

For its  ended April 30, the developer of printed circuit board and semiconductor design software reported record revenues of $230 million, up from $181 million a year ago. The GAAP loss was driven primarily by non-cash charges associated with retirement of convertible debt, the firm said. The company, which lost $23 million in the year-ago quarter, said it would change certain commission payments and consolidate its facilities and IT group in order to cut expenses. The operating income was $16.2 million, up from a loss of $15 million last year.

The EDA company reported strong growth in its New and Emerging product category, and said bookings rose 45% for its Integrated Systems Design products. “Our strategy of leveraging our strength in design automation into adjacent markets is working,” said chairman and CEO Dr. Walden Rhines.

“We are well on track to achieve our full year goal of a non-GAAP operating margin of 15% of revenues,” said Greg Hinckley, president. “Looking forward, we will extend our cost-cutting efforts with further consolidations of facilities and IT, while we continue to raise the bar on commission and variable compensation expense to further align rewards with increasing shareholder value.”

Mentor guided for second-quarter revenues of $210 million, but said it expects a losing quarter. The company raised its fiscal 2011 revenue estimate to $1 billion.

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